ICE Sees Continued Strong Derivative Trading Activity
IntercontinentalExchange‘s (NYSE:ICE) derivative trading volumes saw impressive growth in January, with its daily volumes coming in 11% above the year ago levels. Commodity volumes grew by 7%, and financial derivatives saw a 17% growth. Among commodities, energy derivatives were 6% above the year-ago figure. This is largely due to fluctuations in oil prices. Moreover, the market saw increased volatility in oil prices due to OPEC’s decision to cap production.
We have a $70 price estimate for ICE’s stock, which is about in line with the current market price. Our interactive dashboard shows our expectations for the company’s Q1 derivative trading volumes; you can modify the key value drivers to see how they impact the company’s revenue.
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Due to the rate hikes in 2017, and the expectations of further rate increases in the year ahead, interest rate derivatives continued to attract investor attention. Consequently, January volumes saw a 28% y-o-y increase. Moreover, we expect further growth in trading volumes with the Fed’s expectation of further hikes in the year ahead. Meanwhile, we expect that metals will likely remain in demand as a safe investment asset, leading to fairly steady volumes.
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